Debt management ratio or solvency ratio
Meaning of solvency ratio= Solvency ratio refers to the company can payable or not of the long term debt non current liabilities. it also shows the payable capacity of the company at a time.
- Debt To equity ratio =Debt/Equity OR Long term debt / share holder equity+ retained earning
- Debt To Total capital ratio = Long term debt / share holder equity + long term debt
- Debt ratio OR ( Total debt TO Total Assets ratio ) = Total debt /Total Assets
- Interest coverage ratio = EBIT/ interest